Gender pay equity
A ‘gender pay gap’ is the difference in wages received between men and women for comparable work.
In Australia, women overwhelmingly receive lower pay for the same work that a male colleague would receive. ABS data indicates that in Western Australia in 2019, on average women in full time employment earn 23.1 per cent less than men; the highest such discrepancy in the country. Nationally, women earned an average of $239.80 per week less than men.
What is gender pay equity?
Gender pay equity is primarily the exercise of identifying industry sectors where gender pay gaps exist, identifying the causes behind the differential and addressing those gaps in order to move towards parity between genders.
Equal pay is not simply limited to base remuneration. It extends to additional employment benefits so as to ensure both men and women receive equal pay in total. This includes discretionary payments, allowances, performance-based and merit-based payments, bonus payments and superannuation.
How is the gender pay gap calculated?
The gender pay gap (GPG) is calculated as the difference between the average female salary and the average male salary for the same work when employed on the same basis (i.e. both full time etc.)
It is calculated on the average weekly ordinary time earnings for full time employees, which is published by the Australian Bureau of Statistics. When calculating the GPG, it is exclusive of part time employment, casual earnings and overtime.
Why does the gender pay gap exist?
There are many reasons for the pay gap, including:
- A lack of part time employment opportunities and/or flexible working arrangements. This restricts the ability to combine quality employment with family responsibilities and therefore impacts on current and future earnings.
- The undervaluation of industries that overwhelmingly employ women (i.e. aged care, child care, teaching and social and community, sectors).
- Women taking time out of paid employment to care for family.
- Women being over represented in casual, or “non career”, jobs. These jobs are often lower paid and provide few opportunities for training, development or career progression.
What are my legal obligations?
The Equal Opportunity Act 1984 (the Act) prohibits employers from discriminating against employees on a range of grounds, including on the basis of gender. Discrimination is the less favourable treatment of an individual, or groups of individuals, on prescribed grounds.
The Act prohibits employers from paying women a less favourable income than men who are undertaking the same work, where both have comparable skills and experience.
Employers can minimise the risk of discrimination occurring by using gender-neutral and gender-inclusive selection criteria when creating position descriptions and setting key performance indicators (used for determining work standards).
Additionally, employers should consider their policies, processes and systems objectively and remove any barriers preventing women from accessing work-based training, promotions, career development opportunities or flexible working arrangements.
Why adopt gender quality?
Pursuing pay equity is about indentifying and removing those barriers to ensure equal participation and remuneration for all employees.
- Becoming an employer of choice;
- Creating a harmonious and productive workforce;
- Attracting and retaining staff members;
- Avoiding potential discrimination complaints;
- Increasing staff morale and reducing stress.
Obligations for businesses with over 100 employees
Under the Equal Opportunity for Women in the Workplace Act 1999 (EOWW Act), businesses with more than 100 employees were required to develop a workplace program aimed at removing barriers to employment, promotion and other opportunities (including the ability to achieve comparable pay) for women in the workplace.
This is no longer required. The EOWW Act has now been renamed the Workplace Gender Equality Act 2012 (WGE Act) to put an emphasis on promoting and improving gender equality for both men and women in the workplace. Correspondingly, the Equal Opportunity for Women in the Workplace Agency has been renamed the Workplace General Equality Agency (the Agency).
All non-public sector employers with 100 or more employees are still required to report annually under the WGE Act, however there will be additional requirements. If a relevant employer’s employees fall below 100, they must still continue to report until they fall below 80.
Employers must submit a report to the Workplace Gender Equality Agency between April 1 and May 31 each year for the preceding 12 month period (April 1 – March 31). Employers will also need to comply with new notification and access requirements, including informing employees and members or shareholders as soon as practicable of the lodging of the report with the Agency, providing information on how the report can be accessed, providing access to the report and informing employees and relevant employee organizations of the opportunity to comment on the report to the employer or the Agency.
From the 2013-14 reporting periods onwards, the WGE Act will be fully operational, meaning that employers will be required to report against a set of standardised gender equality indicators, comply with notification and access requirements, and have annual reports signed by the employer’s CEO.
The WGE Act defines gender equality indicators as the following:
- Gender composition of the workforce
- Gender composition of governing bodies of relevant employers
- Equal remuneration between women and men
- Availability and utility of employment terms, conditions and practices relating to flexible working arrangements for employees and to working arrangements supporting employees with family or caring responsibilities
- Consultation with employees on issues concerning gender equality in the workplace
- Any other matters specified in a legislative instrument.
The consequences of non-compliance with reporting requirements remain mostly the same, with the Agency having the capacity to name a non-compliant employer in a report to the Minister for the Status of Women, and non-compliant employers potentially being made ineligible to tender for contracts, grants or financial assistance under the Commonwealth and some state procurement frameworks.
For more information on gender pay equity, contact CCI’s Employee Relations Advice Centre on (08) 9365 7660 or email@example.com.